Cypriot unification and the Cyprus property market

Many people have been caught offguard by the announcement that Greece and Turkey are in talks about the reunification of Cyprus. This is a subject that has been ongoing since 1974 when the island was split between a Turkish Cypriot republic in the North and a Greek Cypriot country in the south. Even to this day there is a UN buffer to ensure no friction between the two age-old enemies although things could change very quickly with further talks expected.

Withdrawal of forces

Each side of the argument has demanded that the other withdraw their forces from the island in order to pave the way for reunification. So far, as you would expect at early stage talks, no side has been willing to give way to the other and there is something of a stalemate at the moment. However new talks are expected to begin on 18 January in Geneva at which point the issue of security will be central.

It will be interesting to see whether the two sides are able to agree a way forward because there seems to be an appetite for an agreement otherwise why begin talks?

Property issues

While there have been major problems regarding the ownership of property in the north and south of Cyprus, the main issue seems to revolve around the “Turkish Republic of Northern Cyprus”. Over the last few years we have seen legal arguments regarding the ownership of property in the region with around 165,000 Greek Cypriots forced to flee the North back in 1974. To balance the argument it is worth noting that around 45,000 Turkish Cypriots were forced to flee the south of Cyprus leaving any property they owned.

There is some debate regarding these figures but it does seem as though Greek Cypriots forced out of the North of Cyprus have the stronger argument at the moment. There is some debate as to whether properties previously held by those forced out of the region will be legally returned or whether previous owners will receive some form of compensation. These two arguments in themselves open a whole host of legal minefields, not least of which, who will foot the bill?

Short-term pain but long-term gain

It would be foolish to suggest that these reconciliation talks will be successful in the short term but there does seem to be an appetite for an agreement from all parties. The confusion this could cause within the Cypriot property market as a whole might see pressure on prices and some investors sitting on the sidelines. However, could it be this short-term pain could very quickly turn into long-term gain in a more stable and reunified Cyprus?

Any agreement would need to recognise the position of prevailing forces in the north and south of Cyprus and create a structure allowing parties to work together for the good of Cyprus. There is therefore potential for a significant boost to the Cypriot economy, property market and interest from overseas investors. This is an ambitious move by the relevant parties and while there will be many hurdles and problems ahead perhaps we are standing on the verge of a new chapter in the history of Cyprus?